A CEO Perspective on SOX: Counterpoint
Check other articles in the series...by Dominique Trempont, Guest Author
As I mentioned in my earlier article on SOX, “there is however a sense that lawmakers went too far and that companies simply cannot afford the cost of implementing the Sarbanes-Oxley Act (SOX).”
I received an email, during this Labor Day week-end, from a famous CEO who is now a venture capitalist. Since I did not ask his permission to quote him, I will keep his name private.
“Good article but I disagree with you. SOX went too far:
- it penalizes small companies unfairly
- it penalizes ethical companies (the ones who didn’t need SOX to have good business practices) compared to unethical companies
- it was enacted without a sense of return of investment (could we have achieved the desired goals through less onerous changes)
- it has emboldened regulators who now feel they are on a mission from God to expunge evil out of companies
- it has created a risk averse culture in board rooms, in management, and by extension, among the ranks and files across all businesses
Other than that, I like it.”
These points are well taken. I just think that Congress laid out the requirements for public companies (and private companies with large numbers of shareholders). There clearly is an increasing cost of being a public company. This leads to a broader discussion on the disadvantages of being a public company and the trend towards going private, that I will cover in another article soon.
This segment is part 2 in a 2 part series
Jump to part: SOX, Counterpoint
